Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2010-11-08
Number: 10-112/1
Author-Name: Tomaso Duso
Author-Workplace-Name: Humboldt University Berlin and Wissenschaftszentrum Berlin (WZB)
Author-Name: Lars-Hendrik Roeller
Author-Workplace-Name: European School of Management and Technology (ESMT) and Humboldt University Berlin
Author-Name: Jo Seldeslachts
Author-Workplace-Name: University of Amsterdam
Title: Collusion through Joint R&D: An Empirical Assessment
Abstract: This paper tests whether upstream R&D cooperation leads to downstream collusion. We consider an oligopolistic setting where firms enter in research joint ventures (RJVs) to lower production costs or coordinate on collusion in the product market. We show that a sufficient condition for identifying collusive behavior is a decline in the market share of RJV-participating firms, which is also necessary and sufficient for a decrease in consumer welfare. Using information from the US National Cooperation Research Act, we estimate a market share equation correcting for the endogeneity of RJV participation and R&D expenditures. We find robust evidence that large networks between direct competitors -created through firms being members in several RJVs at the same time- are conducive to collusive outcomes in the product market which reduce consumer welfare. By contrast, RJVs among non-competitors are efficiency enhancing.
Classification-JEL: K21, L24, L44, D22, O32
Keywords: Research Joint Ventures, Innovation, Collusion, NCRA
File-Url: http://papers.tinbergen.nl/10112.pdf
File-Format: application/pdf
File-Size: 537084 bytes
Handle: RePEc:tin:wpaper:20100112